Thursday, December 04, 2008

Joe the Austrian Economist

Brad DeLong deconstructs Joe the Plumber's rather odd reading list, which apparently includes a bunch of plumbing related books, plus Ludwig von Mises's book The Theory of Money and Credit, which Tyler Cowen apparently traces to the Ron Paul crowd's influence.

Brad sez:

My view is that Money and Credit is very readable--compulsively readable, in fact: I have just spent two and a half hours telling myself "it's OK; I will just read one more page...". But it is only readable in a rhetorical-excess-train-wreck mode, for it is also totally bats--- insane.

I recommend starting at page 416: read through the defenses of the gold standard as the only monetary system consistent with representative government, the attacks on Keynes, the attacks on the New Deal, the attacks on the United Nations, the blaming of all unemployment on labor unions--or on governments--the attacks on private-sector fractional-reserve banking, and stop with the attacks on all other believers in the gold standard not named "von Mises", not dedicated to the root-and-branch elimination of all forms of private fractional-reserve banking, and infected by the errors of the nineteenth-century British Banking School:

Ludwig von Mises, Money and Credit: p. 416 ff: [T]he gold standard appears as an indispensible element of the body of constitutional guarantees that make the system of representative government function.... What the foes of the gold standard are asking for is... to intensify very considerably the already-prevailing upward trend of prices and wages.... Such a policy of radical inflationism is, of course, extremely popular.... How pale is the art of sorcerers, witches, and conjurors when compared with that of the government's treasury department! The government, professors tell us, 'can raise all the money it needs by printing it'[1]. Taxes for revenue, announced a chairman of the Federal Reserve Bank of New York, are 'obsolete'[2]. How wonderful!... eventually... the cleverly-concocted plans of inflation collapse. Whatever compliant government economists may have said, inflationism is not a monetary policy that can be considered as an alternative to a sound-money policy....